Tuesday, November 10, 2009
Fidelity selects FirstRain for new idea generation on Fidelity.com
Another exciting morning today!
This morning Fidelity has announced that it has selected FirstRain as a partner on its new Stock Research Center on Fidelity.com which they launched last week and are announcing today.
You can see FirstRain’s spike and volume detection technology at work for yourself if you go here – look for this section on the right hand side and have fun!
Our research engine is continuously identifying and highlighting trending economic and industry content from the web and then identifying which companies being impacted by these trends. So then, once a user gets interested in an idea the UI takes him/her straight to the Fidelity fundamental research about the company to help them decide whether to trade on the idea.
The smarts we’re putting to work here are the system’s ability to detect spikes and directionality in any one of the thousands of business topics we have built into FirstRain. The topics are all associated with industries so we can quickly pick out what’s hot in any one area like Technology or Energy. We are continuously processing millions of documents and storing the patterns - and so can distinguish quickly when a spike is occurring in contrast to the normal levels of content about any particular topic.
We are obviously delighted with this partnership. It’s exciting for us to leverage our research engine and contribute to Fidelity’s revised research platform.
Thursday, November 5, 2009
How to think about your career path
I was asked to speak to a mentoring group at our audit firm - Frank Rimmerman - this morning. It was an early morning group - all women - all accountants but in different roles: auditors, internal accountants and outsource accounting. All under 40, the majority under 35.
Since it was an early morning session, and I only had 45 minutes, I decided to take a casual approach and discuss three basic guiding principles to help the audience structure their thinking about their career path.
After a preamble about the path my career had taken I walked through the following three principles:
1. Think about your career as a pyramid, not a ladder, and so think about the set of skills you need to build up over the first 10-15 years of your career. It's important to have a realistic view of what you are currently good at, but also what the gaps are in your skillset, and then to pick opportunitities either within the firm, or if need be switch firm, in order to fill in the critical gaps.
In my case I shared the time when I wanted to be a CEO but got the candid feedback from a VC that I would never be recruited to run a startup unless I had experience managing a P&L. Hard to hear, but great advice, and at that point I set out to get a GM job so I could learn P&L management.
2. The people you work with and for are far more important than your title or how much money you make. There are 1000+ ways to do something wrong for every 1 way there is to do something right. Working for high quality people, working with high quality people is critical at the early stages of your career (well it's always important but it is especially important when you are on the steepest part of your learning curve). It is 1000 times more efficient to see and learn the right ways early on.
In my case I have a viewpoint that life is short, we spend many hours every day at work, and it is simply not worth the time to work with and for people you don't respect and that you can't learn from. You don't have to like them. You do need to respect them. Pick a high quality firm to work for.
3. You are responsible for your brand, you must take control of your own PR. It is true in life that people think of you what you think of yourself. They see the you you project to them. As a women in particular you need to be very aware of the projection you give - your confidence, your willingness to speak up, your courage in volunteering for hard jobs. Men often understand this early on - society rewards confidence and even brashness in a man, but while social society does not reward that in a woman (remember you are supposed to wait to be asked to the prom), work society gives opportunities to the confident. So - take charge of your own brand.
Think about the funny side of this and you'll realize how true it is. Women often excel at self deprecation - how many times has it happened to you (if you are a woman) that when someone compliments you on what you are wearing you respond with "really, I got it on sale" or "really, you don't think it makes me look fat?". Men just don't respond that way, they just say "thank you".
I enjoyed talking with the Frank Rimmerman team - they have different issues being in an accounting firm, and yet many of the same issues - how to figure out the catalog of skills they need, how to get mentoring, the child-rearing challenge, and how to network. I was glad to be another voice in the discussion and to share some of my life lessons.
Wednesday, November 4, 2009
Named one of the top 10 women in microelectronics
I was honored today to be named one of the top 10 women in microelectronics by EE Times - you can see the article here.
It's very nice to be recognized, but the fact that I am being recognized 6 years since I left the industry is also indicative of the sad state of affairs - just how few women make it to the top in that field. The other women in the list are almost all women I know well - there were so few of us how could we not get to know one another?
I am on the Anita Borg Institute board - and this is the reason. There are simply not enough girls in the U.S. staying in math and physics in high school, and not enough girls in the U.S. studying engineering in college and as a result we have too few coming up the technical ranks. It's a huge exposure for us as a country to be tolerating an education system and media bias which discourages 50% of our population from participating in the critical technology areas that will lead the world in the future. Nuff said - I'll step back down off my soap box now.
More FirstRain teambuilding at the Great Delhi Run
In keeping with the FirstRain culture of us competing as teams in athletic races - November 1st the FirstRain Gurgaon team took part in the Airtel Delhi Great Run & Half Marathon, along with 30,000 other runners.
The turnout of our team was fabulous, with 28 Rainmakers participating running, including David Cooke from our California office (the pale face in the blue hat below). Everyone met in a huge holding area prior to the run and the atmosphere was festive and exciting.
The run was organized to allow serious runners, teams and revelers alike the same opportunity to make the most of the day. Abhinandan and Ansuman wanted to see how fast they could run the course and so they worked their way to the front of the waiting starters.
Many of the runners were part of corporate teams or clubs, running with banners for their companies or for a common cause they were supporting. There was a sea of banners all around.
Once on the course the Rainmakers ran as a team. 
Our banner was for FirstRain but also celebrated Delhi hosting the Commonwealth Games in 2010 which is a very exciting opportunity for the city.
As the team got to the start line to show our banners off to the various watching celebrities, Shah Rukh Khan (a HUGE movie star in India) appeared, and the mass of runners turned into a frenzy of excitement. The procession of runners stopped for several minutes.
As we ran local bands also provided fun entertainment and encouragement, as did the famous Kingfisher girls.
Great fun was had by all. The competing team felt that it was wonderful to be part of the team at such a lively, vibrant and health oriented event.
It was a first time out for many. Even so at the finish line there was heard talk that several may graduate to the half marathon next year.
Way to go Rainmakers - I am proud of you!
n.b. Cory from our New York office ran the full New York marathon on Sunday and we are all very proud of him too (and were supporting him as he limped around the office with ice on his knee on Monday)
Monday, November 2, 2009
Ad dollars moving into social media in 2010
Guest post: Michael Prospero Director of Research at FirstRain
In 2005, I was one of the analysts covering digital media and online advertising for an investment bank. At the time, most of the analysis was around the way people spent their time with media and the trend of eyeballs and dollars moving online. The number of people consuming their news from the internet was growing and the number consuming news via television and radio, not to mention newspapers, was falling fast. Everything on demand all the time along with the lack of commercial interruption are two of the major reasons for this behavioral change. As people spent less time watching television in the traditional manner (i.e., not using a DVR where they can skip commercials) they spent more time online. This trend continues today as people are watching movies on their computers that they download directly from Netflix or the watch TV shows online with sites like Hulu.
Gradually, advertisers began to follow the users online where they could accurately measure the success or failure of their advertisement using technology e.g., click tracking. The trend continues today and with the exception of certain sporting events (Monday Night Football or the Olympics), it is considered a much less efficient means of spending advertising dollars especially for certain demographics. However, this trend of ad dollars moving online was fairly slow compared to an emerging sub-trend. Social Media/Networking sites have surpassed email in terms of time spent online.
“Nielsen Company reports that the time spent on social networks and blogs accounted for 17% of the total time spent on the Internet in August 2009.” The interesting fact about this trend is how fast it has happened. In just one year, the time spent on social networking has tripled.
Just as it happened with ad dollars moving online following customer eyeballs, you will see ad dollars moving into the social media space at a rapid rate in the next year. It’s no surprise that the sites that stand to benefit the most today will be Facebook, MySpace and Twitter. In fact, eMarketer projects that social network ad spending US marketers will increase their spending 13.2% in 2010, to $1.3 billion. If most of this new ad money is spent on the handful of the most popular online social destinations, I expect a number of new competitors to emerge in this fast growing space in short order.
Sunday, November 1, 2009
The pros and cons of going public vs. selling your company
I taught two classes at the Haas School of Business at Berkeley this week and the focus was on "Exits". One small class, one large, both were sets of students studying how to become entrepreneurs and start and run their own ventures.
Fortunately, having bought several companies, taken a company public, and sold my last company this was a subject I didn't have to do a lot of preparation for so I took a few minutes to tell my story (so far....) so they had the context on me and then I took questions.
Interestingly enough, the focus of the professor was on IPO vs. selling as exits, but I explained an IPO is not an exit for you as the CEO, only for your private company investors, because when you are CEO of a public company your mindset needs to be that you are in it for the long haul, for years, and exit is the last thing on your mind. It's call "Initial" for a reason, it's the beginning.
Here are the key points from the classes:
IPO (Initial Public Offering)
Pros:
- access to the capital markets (really the only good reason to do it)- if you need significant capital to grow this is usually a much more efficient (less dilutive) way to raise money than through the private markets like VCs
- cash in the bank to weather ups and downs
- liquidity for your investors - usually 180 days after the IPO when the lock up comes off
- liquidity for your employees - ditto
- better transparency and often higher confidence for your customers
- currency (your stock) with which to buy other companies and to build your business faster than you can organically
- you can build a new board of long term advisors instead of VCs, although some of the best VCs stay on the boards of their companies for the long haul (like Tench Coxe at nvidia and Bruce Dunlevie at Rambus)
Cons:
- you don't get liquidity yourself - as the CEO it's "bad form" to sell your stock any time soon after an IPO, some would say ever while you are CEO, because if you believe enough in your company to persuade other people to buy your stock, why would you be selling? (the only exceptions to this are for tax selling). Note I never sold a share of Simplex before it was bought by Cadence.
- transparency - there is no where, no way to ethically hide a bad quarter if you are public
- cost - estimated to be $5M a year in additional cost now post Sarbox
- time - you'll spend at least 1 week of every 12 talking to investors and preparing for your earnings call
- you have to spend a lot of time with investment bankers and lawyers
- you won't sleep much for 90 days
Selling your company
Pros:
- a way to accelerate your strategy if you chose the buyer wisely - you should get more investment and a better (larger) channel for your products - larger companies can scale a good fit very quickly as we saw with Cadence and the Simplex products and as Cisco demonstrated so well in the 1990s
- liquidity for you, your investors, your employees
- a way to declare victory
- a way out if you are reaching your limit - either your skill or your energy level without the risk of hiring a new CEO
- you are longer in the lonely position at the top - the one where the buck stops
- you don't have to deal with a board any more
Cons:
- absolute loss of control of your strategy and the investment in your strategy - make no mistake once you are sold, no matter what the buyer tells you on the way in, you are no longer calling the shots for your people and your products
- some of your employees will be let go - often finance and sales are let go because they are overlapping, maybe even R&D for overlapping products - this is heartbreaking because you've built the company together
- being bought is not a fun process, it's grueling
- you have to spend a lot of time with investment bankers (if you need them on the deal) and lawyers
Bottom line you shouldn't plan for your exit. The way to win is to set your sights on building a great, high growth company for the long term and make decisions to that end. Never make decisions because you are going to sell because you just don't know when the opportunity will come along and you'll make a weaker company as a result. Don't obsess on your percentage (as I have seen entrepreneurs do) - obsess on the size of company you are going to build and what it can be worth one day and have confidence that you'll do OK.
And when the opportunity to go public, or to sell your company, comes along think long and hard about the loss of control of your destiny, either way, and be sure you want it before you do it.
p.s. I LOVE that United now has Wifi in the air. I can be productive the whole way from SFO to NY.
Monday, October 26, 2009
FirstRain Diwali celebrations
A note from our Gurgaon office:
Diwali, the festival of lights was celebrated in the Gurgaon office in a colorful way. The dress code was ethnic Indian dresses as the "fun group" organized a bay decoration competition and also got a few stalls put up by the employees. The ambiance was fun-filled with good food around as enthusiastic team members came up with amazingly creative decoration ideas.
Our industry modeling team won by a slight margin over the source management team, with both depicting the various facets of celebrating the Diwali festival. The games put up and the stalls were equally exciting.
Overall, it was great to see the technology and research savvy team show off their creative and artistic abilities.
Thursday, October 22, 2009
When being slapdash can hurt your career growth
One of the things I feel privileged to have the opportunity to do as CEO is to counsel our managers on how to coach their employees. I'm long enough in the tooth now, and I've see enough different types of employees, that I can often get to the essence of what minor course correction is needed to help someone advance.
One of my managers brought me a classic case today. This is a case of a skill that you've honed is now getting in your way.
We have an employee who is very talented and very smart, but he's slapdash. People go to him for advice and product input. Customers talk to him about how to use the product - and then how to apply it to their problems. And he's quick in everything he does. I believe he's learned how to make decisions fast, crank work out fast and move onto the next thing - and it's a life skill to him.
However, he's now at the point where while 90% of his work is great, he's producing some work that affects customers and it's sloppy. The course correction that is needed is not unlike the advice I give my son every day - check your work!
The challenge is (which I can personally relate to) how to slow down enough to do the boring step of checking - for example that the memo you are writing is crisp, or the product feature you are specifying is right. The check can be as trivial as spelling and punctuation, it can be as complex as ensuring that a feature covers all cases that might come up.
The checking step is boring and there is little positive feedback for doing it, just negative feedback when it isn't done. And the very skill that served you well in college - how to get a mountain of work done in a short amount of time so there was time left to party - is exactly the skill that has to be moderated now.
I find in coaching that some of the most interesting growth spurts come when you can show someone that, as Sun Tsu said "your strength will become your greatest weakness" and help them overcome the flipside of their strength when it shows up. Then the employee is in control of when to use their learned skill, and when not to.
Friday, October 16, 2009
Report from ReadWriteWeb's Real-Time Web Summit
Guest post: Marty Betz, VP Technology
Today, YY and I attended ReadWriteWeb's Real-Time Web Summit. It was held at the Computer History Museum in Mountain View, hosted by Marshall Kirkpatrick of ReadWriteWeb.com.
Like many conferences recently, they'd adopted a structure based on an open, spontaneous agenda which gets filled in by the participants during the first hour. It turns the meeting into a focused networking event that fosters exchange of technical questions and information between the attendees, and minimizes the time spent having one person speak at a large audience. This worked surprisingly well. It seems this is a natural evolution of conferences. Now that much of the information that was once delivered from a lectern can now be found online, meeting new people and discussing specific problems is where unique value is found. I'm always impressed by how many attendees are willing to put themselves out there and deliver a semi-impromptu presentation, or run a discussion.
The talks ranged widely, from protocols underlying real-time communication, to human factors associated with information processing, to data extraction and natural language filtering techniques. Of course, there was also a good share of "how do we monetize this" chitchat.
My initial observations are that, even though the crowd was self-selected for real-time web interest, there was healthy cynicism about it's value. One talk was even titled "Why do you hate real-time..." On the other hand, there was a palpable sense that something important will emerge out of the web's new, faster and denser information flows; we just can't predict what it is yet.
The host, Marshall, started by proposing a spectrum on which ideas were organized based on whether they focused on person-person communication, person-machine communication, machine-to-person, etc.
Every hour had several different talks to choose from. I first dropped in on a talk about the service PubSubHubbub from Google, and then another about linguistic techniques for filtering twitter feeds. My next hour included discussion of structured information and tools for collecting and deriving structured entity relationships.
YY ran a great session on how to make use of the way the web changes, over the course of the day -- and longer time periods. It raised questions about how can you distinguish the significant change patterns from the incidental ones? It evolved into discussions of when and how long "old" information remains valuable, and it gives valuable context to recent data. Others in the group talked about filtering highly noisy sources, the practical requirements and limits of human attention, questions of push vs. pull information delivery, and the frequency with which people can really ingest and make use of content streams.
I finished the conference attending two light afternoon talks. The first was on the importance of "emotion" in the value we attach to real-time content. There was animated conversation about how data you get from another specific individual can come with the baggage and the benefits of your immediate relationship and that person's mood. Finally, I enjoyed a round table discussion of how soon "augmented reality" will become a reality.
Overall, I thought the conference was a great experience. As usual, the web continues to change year after year, and new problems arise, raising new opportunities. I am confident that the increase in real time data will, like other changes in the past, inspire FirstRain to find unique loads of derived value in the web.
Tuesday, October 13, 2009
How "team" is different in a small tech company
Guest post: Michael Prospero, FirstRain Director of Research
Throughout my professional career, I have worked for large financial organizations employing 100s to 1,000s of people. Therefore, I was one member of a very large so-called "team".
Every organization I have worked for attempted to make me feel as though I am a part of a team working toward a common goal. However, if I am one analyst or one person in accounting ( or whatever your job function may be ) I really never feel like my group and the other departments, functions or locations are all working together. In fact, I would rarely interact with other departments unless for some reason I was required to because of some need of theirs or mine. I always felt like just an employee in a large organization. Often the CEO never knew who I was and I may have only met them briefly at some function. There wasn’t any team building to bring us together. We never really got to know many of the others in the organization unless they sat near us or worked in the same department. In fact, employees were only in the same room together during a rare HR requirement or speech by the CEO, who wasn’t necessarily in the same office as us.
Three years ago, I accepted my current position knowing that I was about to begin working for a small company, which was essentially a mature start-up at the time. FirstRain continues to have a aggressive small company - like a start-up - type of culture, which is so different from a corporate environment that it would require a much longer post to describe it all to you.
To me, the refreshing part of working in this type of environment is truly being part of a team. Not the team that corporations pretend to be, but really a team of people all working hard at their respective positions to reach a common goal. To use a sports analogy, it is like being part of a football team. If each person doesn’t perform well at their respective position, the team may lose. If someone misses a block or a defensive assignment, the whole team suffers and may lose.
I guess working at FirstRain brings me back to those days when I played competitive team sports. Today, many of the employees at FirstRain are very different and we work in three different locations and in two countries. We bring different backgrounds, skill sets and even cultures together in a unique way and we are all working very hard to do something that hasn’t been done before. To bring us together, every so often, we have an activity set up where we are doing something outside of the office from movies, to half marathons to bowling. During our company outings, we are provided with an opportunity to get to know each other in a real way and it’s invigorating. Also, we have frequent all hands meetings where our CEO will hold a call to discuss everything going on with the company and responds to all questions from any employee.
Working as part of a team is the reason sports are so popular around the world. If you ask any retired athlete what they miss most about their playing days, they will almost invariably respond that they miss being part of a team. In many ways I’ve learned more in the past three years working at FirstRain than I have in my entire career. I feel my work contributes to each win that we have as a team.
Note from Penny - I promise I didn't ask Michael to write this - I think he's having fun!
Monday, October 12, 2009
Current example of a sales team using FirstRain to stay ahead
Got email from a client last week really pleased with the information they had found on FirstRain to help them with a campaign.
Here's the story: A small software company selling to a large energy utility. They sell software to help automate and improve customer communications.
In this case the sales team was doing a detailed business process analysis to show the utility how much money they could save by upgrading their customer communications, and how they would also improve their quality.
Friday afternoon - meeting with the CIO to present their findings. The CIO walks in, out of sorts, the company had just been in the news as losing customers because of their inability to invoice customers correctly (right in the sweet spot for this sale). On a break during the meeting the sales team looked for the news story - wanting to make sure they understood the severity of the issue and how to use it in their sales cycle. They looked on Google - not there - then on FirstRain - straight to the link and then able to use the research engine to understand the background.
The sales team is now using their additional knowledge to help the customer get on top of their billing issues quickly - and sent us an email saying "Thank you FirstRain".
(the story is anonymous until they win the contract - then we can name them)
FirstRain is going to Dreamforce 2009
It's an exciting new development for us as we gain traction selling into corporate sales teams - this year we will be exhibiting at Salesforce.com’s annual Dreamforce Global Gathering as a high tech industry sponsor.
The conference is at the Moscone Center, here in San Francisco from November 17th- 20th, and we will be at booth #331 demonstrating how powerful our research engine is for the sales professional.
FirstRain has been serving corporate clients - both sales and marketing professionals- across a variety of industries like pharma, high tech and financial services for years. Sales people use FirstRain to prospect for compelling events and sales triggers with their territories - something that tells them of a new event to call on the customer from - all within the environment that also tells them all the background information they need before making the call.
Now, with our slick, new research engine, they can quickly find the information on their customers, competitors and industry trends even more easily than before.
For example:
- a sales team from a major pharmaceutical company uses FirstRain to track their territory, competitors and even what’s being said about their own company.
- a blue-chip commercial bank uses our product to cross-sell and up-sell ideas as well as gathers competitive intelligence.
- a Fortune 500 technology company identifies lead generation, relationship development and idea generation products when using our application.
- a biotherapeutic firm monitors that top clients and further develops relationships with FirstRain.
Whether conducting on-the-spot interactive research, sending themselves regular research reports, or monitoring their folders with the news important to them- salespeople receive highly relevant, targeted information in the way that works for them.
Using FirstRain along with salesforce.com is a natural fit in the sales workflow - we just make it so easy to find all the relevant information about a company or industry in one place. It's all about time - how much time does the sales person waste looking for information and being bogged down by repetitive junk? We're having fun showing sales teams how much time and distraction they can remove from their day now with the research engine.
If you are attending the conference, stop by and see us!
Tuesday, October 6, 2009
ReadWriteWeb Top 50 Real-Time Web Companies
We're delighted to be listed in the top 50 real-time web companies list from ReadWriteWeb. You can see the complete list here.
The list is in preparation for the The ReadWrite Real-Time Web Summit, which is just over two weeks away, and our two top technical brains - YY and Marty will be there participating as speakers and panelists. Should be a fun conference.
A new world order: Have the US Dollar and the Yen traded places?
Guest post from Michael Prospero, FirstRain Director of Research
For many years, the Japanese yen has been a common vehicle used in currency carry trade strategies as the Japanese interest rates have remained low relative to other world economies. However, in the past few months, there has been increasing interest in use of the U.S. Dollar as the new currency used in carry trades. There are indications that the two currencies have traded places in the pecking order. In fact, at least one professional investor believes the U.S. Dollar isn’t even the new Yen, but the new Peso - and today's news from The Independent that the Arab states are silently trying to move the oil currency from dollars to another currency like the Yen, the Yuan or the Euro certainly feeds the uncertainty of the dollars future.
So what is a currency carry trade ( and why should you care )? Essentially, currency carry trade is an attempt to make money on the bet that one depressed currency will remain low, or fall further, relatively speaking. When a country’s interest rates are low as they are in the U.S. right now, it is relatively inexpensive to borrow U.S. dollars and invest them in another country where interest rates are higher; the higher the better. The difference between the borrowing rate and the investing interest rate is your profit.
And we care because of the impact on the U.S. dollar and the U.S. economy. Although there is no way to verify the size of a currency carry trade there are indications that the current U.S. Dollar carry trade is quite large. This means investors are borrowing a lot of money here in the U.S. and investing it elsewhere, which is not a positive sign for growth for the U.S. economy.
However, there is one small positive in terms of diversification of investments. The dollar historically moves in the opposite direction of the stock market and this has held true this time as well for the U.S. stock market since its trough in March of this year. Therefore, it is a good way to hedge your equity portfolio, but the ramifications for the U.S. economy are troubling to say the least.
Monday, October 5, 2009
Team building at the Rock and Roll Half Marathon
Regular readers of this blog may remember that the FirstRain team likes to take on physical challenges together - like last year's AquaBike. Well this year (yesterday) ten of us completed the San Jose Rock And Roll Half Marathon and I am very proud of them all for taking it on and every one of them for completing the course.
It was a perfect day for it. The FirstRain team and 15,000 people lined up at 8am in downtown San Jose to try to conquer the distance each in our own way. Hats of to our controller Eugene who ran the race in 1 hour and 42 mins - we were still walking in the first half when we saw him running the last stretch and cheered him on from across the road. Also hats off to Ana, David and Dennis who did their best distances and times - very impressive.
A few of us walked it, some in more pain than others, and YY comically awarded me the "Stubborness" award for doggedly finishing with the slowest time of the team. After the race we retreated to BJs for much needed food, water and alcohol (purely for medicial purposes of course).
Next FirstRain race is a 7km in Delhi on November 1 - the Great Delhi Run. David is planning to be in Delhi that week anyway so he's challenged a team from our Gurgaon office to run it with him. We'll see how many sign up for it!
Now we have to decide what race we'll chose for 2010 in California. Frankly I found the half ironman aquabike last year was easier to finish than the half marathon this year so I'll be lobbying for something in the water next time.
Me leaning against the post for relief at the 9th mile marker
Friday, October 2, 2009
I Am A Technical Woman - Anita Borg Institute
I am at the Grace Hopper Conference today in Tucson Arizona - here as a member of the Board of Trustees of the Anita Borg Institute for Women in Technology. Check out the video the team made last night (and which is at the top of Digg this morning) - it will make you smile and give you sense of the power of this group of young women.
The conference is a spectacular success - 1600 attendees - 99% technical women and 50% students. The energy and enthusiasm for technology is contagious and exciting to see.
The Institute is all about women AND technology: helping women come into and stay into technology - particularly computer science today although we are expanding - and helping the influence of women on technology. We've gone from barely surviving 6 years ago when Anita died to now being a thriving organization with a budget of over $3M and an annual conference that is a sellout even in a recession year - and I fully expect that we will continue to grow from here.
Today we are very strong in the IT sector - the majority of our sponsors like Google, HP, IBM, Sun, Cisco, Microsoft, NetApp (to name just a few) to our newer sponsors like SAP and Symantec - are in the IT business but we have strong interest from the financial services sector and the government and defense sectors. I bet today we are going to be talking about how we staff up and bring up some sectors specific programs to bring the leaders in financial services into the Institute. I had the pleasure of meeting with senior women from companies like Goldman Sachs and BP last night and no matter how diverse their businesses are they need and use technology and want diversity in the workforce - and we can help!
Thursday, October 1, 2009
The MacBook Air is a terrific product
I had posted on September 15 that my PC had died and I was considering whether to go Mac for work - well I did!
The key app for me to be able to do this is VMWare Fusion which allows me to run Outlook on my Mac (it runs a PC emulation window). This is essential because I have a complete archive of FirstRain emails in my local inbox (all filed by topic) and I could not afford to not carry these forward. Hence any laptop decision was constrained by my ability to continue to run Outlook.
To my IT team's credit - when I walked into the office with a long face about my dead PC and a yearning for an Air they dug in and figured out how to make it work for me. So now I have an Air on my lap (sitting at San Jose airport waiting for a flight) and I can live in a Mac world for everything except email. It's so very, very much better than a PC. It's a modern OS, with modern apps, and now a seamless interface into my home computer world which is MacBooks and Drobos for all our media (we have all our music and DVDs ripped and stored digitally on Drobos which are home RAID drives so all four of us can access all our media whenever we want - and we can watch any movie we own on the AppleTV under our TV).
I am a very happy user - and very grateful to my flexible IT team. Only problem now is we have to hope Apple brings the price down over time so we can afford to have more Air's in the company.
How to write a performance review
We are in the final stages of our annual performance review process here at FirstRain and it's a great time to visit what really matters when writing a performance review.
My first principle is that everyone deserves a performance review - it's a benefit and a right. I believe we owe it to every employee to listen to how they see their own performance, listen to their ambitions and what they want to learn next, and share our observations, advice and encouragement at least once a year. In reality it is something I like to do on an ongoing basis but at least having a formal review process ensures the conversation happens at least once a year.
So to the content of the review. We use SuccessFactors which (while not perfect!) structures an easy to use process to move the performance review documentation through the process.
The structure of our reviews is
section 1: assessment of the employee against our 5 core values
section 2: assessment of the employee against specific job skills (only 1 or 2 per job)
section 3: summary and overview assessment
It is the managers responsibility to communicate to the employee that the review time is here and what the steps are going to be so the process is clear.
First the employee writes their self assessment. How do they rate themselves against the values and job skills (on a scale of 1 to 5 and a brief description for each category)? What's going well and what isn't. Where would they like to improve, what help do they want from their manager or the company.
Next the manager talks with the employees peers and senior management. What is their observation of what's going well? What behaviors should be praised and reinforced? Where are there opportunities for improvement. This is a 360 process of getting input around the individual to be able to give them useful and grounded advice.
The manager then writes up their assessment. Rating each category and writing up what is great about the employees performance, what could be improved, and advice. I find myself writing the phrase "I encourage you to..." many times. I manage senior people - there is very little I would ever "tell" someone to do because how they perform is their choice. I try to encourage and advise but it's up to them what they do with that advice.
The step of the conversation about the employees performance is the most important step. This is where absolute honesty and integrity makes all the difference to whether the review is a positive or negative - useful or destructive experience. I believe it is very important to be straightforward, kind, use humor and above all else be direct but non judgmental. If you are direct you have a much higher chance of being heard and understood, rather than the employee shutting you out. This is a process that really should be going on continuously. I feel I have failed if there is a major surprise in the conversation - although this does sometimes happen.
Finally the employee has a final step of being able to edit their review, or comment on your comments, so the complete conversation is documented. And then you both sign.
I had 10 reviews to write this year. In each one I was able to give positive feedback on the many things that are going well and the great progress and growth we have made this year. And in each case I thought carefully about the one or two areas of advice I would give to help each person grow in the coming year. It's the least I can do for a team that is working as hard and being as creative as my team is being.
How trust impacts you when you're overloaded
I've written before about how I believe trust is very efficient when running a company and yesterday I had a classic example of it.
Yesterday I was trying to decide whether to go to the funeral of a close family member in England next week. The decision was non trivial because I am very over committed right now with work, boards and family and taking 3 days to go to the funeral seemed out of reach. I sit next to YY and Ana at work and spoke with them both about my decision right after speaking with my father about the family's plans and whether I could be there or not (and listening to the subtle, subliminal messages only parents know how to send).
YY made it all very straightforward for me. She reassured me that FirstRain business could wait, the team would cover, and more importantly pointed out that 5 years from now all the things I am worried about for next week would not matter, but that whether I was at the funeral or not would matter. That I would not regret going and I could well regret not going.
As CEO I strive to always put the company first - it's a labor of love (as one of our investors thanked me for this week) and I never want to make a decision that could reduce the chances of FirstRain thriving. But being able to trust my team and trust their advice makes it all so much more manageable and time efficient.
I have unfortunately worked with too many turkey executives who I did not trust in recent years (pre FirstRain). The difference at FirstRain is like night and day.
Wednesday, September 23, 2009
FirstRain on AltSearchEngines
My guest author post on AltSearchEngines here - posting about the technology under the hood of the new research engine. Full text here:
FirstRain announces research engine for business professionals
FirstRain’s new research engine is a breakthrough technology for solving the business search challenge.
Until now, search tools have failed to successfully address the problem of detecting and synthesizing business relationships from web data. We believe that only through these relationships can one produce truly relevant search results and analytics highlighting emerging trends and facts about businesses. Of course, search has made tremendous advancements in the last 5+ years. Structured search has blossomed in consumer-focused segments – for example movies, music and shopping – but not in the business segment. Business structured search has been notably un-served.
The heart of the challenge is that information about the structures driving industries and companies are: 1) continuously changing, 2) implicit and not explicit and 3) distributed through vastly heterogeneous sources. These business structures must be derived and then continuously maintained to be meaningful to informed professional users. FirstRain utilizes statistical methods and pattern-detection techniques to derive these business relationships from the corpus of news, commentary and in-depth industry sources on the web. The FirstRain system then generates complex business-structure models which drive its indexing, categorization and analytics engines. The result is a user experience based on relationships between companies, industry structures, people and business topics. The system delivers context-aware interactive search, plus the ability to detect emerging trends and synthesize patterns from business activity around the world.
The FirstRain research engine finds information that was simply impractical to find before. You can search, filter, cross reference and research companies, the markets they operate in, the business trends impacting them and the specific people moving between them. Users see a holistic view of a company’s ecosystem – its business lines, competitors, company-specific topics and industry-specific topics – and so can see information and trends from across the breadth of the web: from mainstream news, differentiated content and specialized content.
To view the video Demo just click here.
FirstRain is now used by sales, marketing, competitive intelligence, investor relations and investment professionals to find new opportunities and to efficiently stay current. For example, a sales team at a major blue chip bank uses FirstRain to generate cross-selling and up-selling ideas, as well as to gain competitive intelligence. The marketing department of a major pharmaceutical company monitors top suppliers and their markets and how it affects their pricing. Many investment managers use the research engine to generate new investment ideas and monitor their portfolio.
The proprietary technology that FirstRain has built provides you with easy access to organized and relevant content that is most important to your business. It’s an exciting, sleek new technology which sets the bar very high for business search.
Please note!
If you would like an opportunity to test it out, it is available to the first 100 people coming in from AltSearchEngines for a trial period.
Click here and use the referral code AltSearchEngines to try it for yourself.
Teambuilding through the Rock N Roll Half Marathon
You may remember that last year a FirstRain team completed the Aquabike - a half-ironman distance swim/bike race. Well this year we decided to pick a different forum for team building - still a race but more appealing to the R&D members of the team.
This years it's the San Jose Rock N Roll Half Marathon on October 4th. 13.1 miles - and you can run or walk. We have most of the California team involved (and hopefully all will make it to the beer garden afterwards) and we have a mix of walkers and runners (although I suspect the walkers will outnumber the runners by 2:1). All California folks - but several of our NY team flew out to repeat the Aquabike this August - there is a hard core athlete team developing in the company.
Competing together is a great way to build teams. We're all working so hard it is important to spend time playing together too - and getting fit at the same time can only help our mental acuity.
Tuesday, September 15, 2009
Time for Outlook on the Mac - and Mac in the office
My PC died this weekend. Dead as a doornail. So while I am working with an interim Sony Vaio patched together heroically by Mike T yesterday - it's time for me to buy a new laptop.
I believe I am facing the same decision as many business people who now, for the first time, can choose a Mac for the office. Hurray!
Macs were always considered superior machines for artists and media, but rarely supported by IT in corporations because of the strong hold Outlook has in the business person's workflow. But over the past few years the iPod, and then the iPhone, have radically changed how the majority of business people view Macs. We have come to realize how elegant and versatile the Apple architecture is and how joyful and powerful it can be to use a Mac every day.
The final break in the dam will be Outlook. Gartner believes (and I agree with them) that native support for Microsoft Exchange in the Snow Leopard operating system will drive end user demand in the enterprise. Maybe this will create a tipping point of dramatic growth for Apple and Macs in the workplace. But even before that is available (they're saying year end) you can run a Windows emulation window on your Mac desktop in the meantime.
Cisco is leading the way in a new idea to allow employees to choose their own work laptops - including a Mac! Frankly I love this idea. Select a short list of approved machines (so you can manage the IT support) and give employees an allowance to buy all their gadgets with so your costs are bounded. If the employee wants more gadget cost than the budget they can choose to make up the difference themselves.
We are already flexible with some employees using Macs in the office (especially our UI designer) but they provide much of their own support. A larger company would have the scale to provide both types of support within a bounded set of computers.
So I think a trip to the Apple store is in my future later this week. I long to have one machine for everything (since we are a Mac/many iPod/many iPhone/AppleTV/ Drobo family at home I have a Mac Pro on my home desk). Maybe now I finally can.
Saturday, September 12, 2009
Mergent selects FirstRain
Exciting news for us this morning. We are announcing that Mergent has partnered with us as the source of business news into their Mergent Online information platform. Mergent provides a very rich information platform used by libraries, corporate and government functions and academic institutions and approached us to improve the quality of the business news they were providing their customers.
Our data feed version works well in a case like this. Our customer tells us the type of content they want - what companies and what topics the content should be categorized against - and we produce a high quality feed of links to the appropriate web documents which we continually update. This is a similar approach to the way we provide content to our partner Capital IQ and to other customers (who wish to remain nameless).
Obviously we are delighted with this partnership - and I admire management teams who have the vision and the courage to buy their company (as the Mergent team did when they bought it out from Xinhua Finance last year) so I am very pleased to be able to support them.
Here is the press release from this morning.
FIRSTRAIN PARTNERS WITH MERGENT TO DELIVER STREAMLINED WEB CONTENT THROUGH MERGENT ONLINE
Search-Driven Research Provides a Broader Perspective of Web Coverage
San Mateo, Calif., September 14, 2009 - FirstRain® today announced it has partnered with Mergent, Inc., to deliver unique web content through their market-leading Mergent Online platform. The FirstRain research engine will provide a continually updated data stream of high quality web results that will allow Mergent Online clients to quickly and efficiently discover web information that is essential to their research. This partnership represents an expanded data set of web sources, to include not only mainstream sources, but also differentiated and targeted content—such as industry journals and blogs.
FirstRain is the leader in identifying, extracting and analyzing qualitative information from the web on companies, business topics and markets for professional business users. The research engine technology allows users to be confident in the precision, relevancy and cleanliness of the content that is retrieved. FirstRain's proprietary algorithms identify and extract content from a vast range of web sources from around the world. Categorization then identifies and creates relationships between companies and among business topics creating an ecosystem - a holistic approach to company research and monitoring. This allows FirstRain to provide comparative and meaningful analytics by highlighting trends and relationships from qualitative data.
“Our partnership with FirstRain significantly improves the qualitative intelligence we are able to provide by identifying content from a broad range of sources,” said John Pedernales, Mergent’s Executive Managing Director and Director of Equity Research. “Integrating results from FirstRain into our platform for academic, corporate, public and government libraries allows our clients to have a richer, more complete research experience. The business relevant content delivered by FirstRain complements our offering and empowers our clients to quickly and efficiently find information that is most relevant to their research.”
“We are delighted to have been selected by Mergent to power the business news capabilities on the Mergent Online platform,” said Penny Herscher, President and CEO of FirstRain. “This partnership takes advantage of FirstRain’s unique ability to deliver quality, new and interesting - and highly categorized - web information that provides value to users doing qualitative research in any information platform.”
Releasing into production
The new FirstRain research engine went into production as planned on Labor Day last week.
What is most impressive about this date is that YY and her team told the board that date at the April board meeting. Now as often happens with software the scope changed during the development cycle, some things came in, some things went out, features got prioritized based on user feedback and some things we thought we'd want to do in the end we decided to drop. But we stayed focused on quality and the user experience, wanting to create a breakout product for our users.
Overall it was an impressive accomplishment. Very ambitious plans often slip out, but not this time. And it was ambitious. To put together the first search engine that derives the underlying network of businesses: companies, related business topics, related markets and competitors, and that then uses that business structure to produce highly relevant results (unlike consumer search) and analytics.
We are not done by any means. But now we are onto the polishing stage for this version, and the fun planning stage for the next major entities that business people care about.
I'm honored to work with this team. Just honored.
Tuesday, September 8, 2009
Why Carol Bartz' stock sales make sense - and the pundits should know better
There are a number of posts winging through the web today about Carol Bartz selling $2M of stock so far this year. You can see here about "investors getting concerned" or here that "Insiders treat Yahoo like their personal ATM".
The misunderstanding of the analysis astonishes me. Now, I don't expect every reader to understand how executive pay works - and how tax selling works - but it is not rocket science so I do expect journalists to have a better grip.
The Yahoo filing on Carol's compensation is very clear. There is a salary component ($1M per year), she has significant options grants ($5M worth) that only vest when Yahoo stock goes up and stay up (great alignment with shareholders), she has a promise of future grants ($8M worth) in the annual grant cycle for executives and then - the item that is probably the root cause of the consternation - an initial stock grant (stock NOT options) for $7.5M (along with $2.5M in cash).
This last grant was direct compensation for money she was walking away from in her old position. This is very usual logic - the Yahoo board wants you to walk away from $10M+ in compensation - they offer $10M as a hire on incentive. In this case the $7.5M restricted stock grant vests over 4 quarters in 2009.
Now to her sale of $2M of stock that is being hyperboled about. Carol is being granted $7.5M in restricted stock which is taxable at the time of the grant during 2009. This means (in California) she owes at least 35% in tax (probably more) this year. That is at least $2.6M in tax. It is absolutely normal for executives and board members to put plans in place (governed under rule 10b5-1 so they are not insider trading) to sell some restricted stock at the time of the grant in order to pay the tax due. When the tax bill is over $2M it makes basic business sense to do this.
Why then are the bloggers & press frothing about it? Yahoo has clearly stated this is tax selling. Please do your research first and then only whip up the crowd if you find something that is out of the ordinary or signs of inconsistency.
Chief cook and bottle washer
We released the new research engine into production last night much to everyone's delight. It's hot and if you'd like to try it out go here and give my name as your contact.
But as you would expect after a long weekend of extra work there were a number of coffee cups and dirty glasses lying around the office. We have a small office in California and theoretically a "wash your own dishes" policy but I have developed a habit of washing whatever dishes are in the sink when I get in.
This morning I walked through all the cubes and collected up all the glasses and mugs - quite a few this time.
Some of my folks have asked me why I do the dishes? It's simple to me. I work for my employees. It's my job to do whatever is necessary to make them more effective and so make the company more successful. Given how hard they work, and the long hours they work, seems to me the least I can do it make sure they have clean dishware to chose from when they want a cup of coffee. It's part of the culture I want to build - we do things for one another.
Now my teenage kids... that's a different question altogether!
Friday, September 4, 2009
Photo shoot: laughing and crying
It's the day before a long weekend, a quiet day in the office, and I was scheduled for a photo shoot this morning. A national publication interviewed me for a story and, to my surprise asked for a mug shot but wanted to send their own photographer.
I don't mind being photographed but I don't relish it either. I'm too self conscious but it's good for FirstRain to have the exposure. Today was challenging though. It's a beautiful California day but windy. Really windy. So as the photographer shot, and the art director quaffed my hair, my eyes began to water from the wind. It felt like I was crying, and then was laughing at how challenging it was.
And Dennis came out with the candid camera so I'm sharing for smiles.
Tuesday, September 1, 2009
When do you "make money"?
The phrase "make money" has come under some energetic debate inside FirstRain over the last few weeks and has caused me to think about what it really means.
Why now? Well we are bringing out a campaign around the new research engine that starts with the prompt "When was the last time search made you money?". The debate is all around whether "making money" is what we really do for our clients - is this a good thing or a tacky thing - and what does it really mean to "make money" anyway?
What's interesting is that the very word "money" derives from the place of its making. One of the many gods worshiped by the ancient Romans was Juno - the Queen of Heaven. According to Cicero a warning voice ("monens") was heard coming from the Temple of Juno on the Capitoline Hill during an earthquake and the temple was then known as the Temple Juno Moneta. In the later days of the empire the mint for silver coinage was in the temple - hence coinage was "de moneta" - from this temple. Hence the old French "de moneie" - and then by 1290 the first use in English of the word "money".
But this is about coinage - the hard material of money. If you are a sales person however, you make money when you get contracts signed - or do you? As is typical in software businesses, our sales team are measured on quota achievement and their percentage achievement of quota at the time of signing a deal determines how much they will get paid for the deal - and it ratchets up aggressively as they go over quota. So the time of signing makes them money. Except...
Again as is typical, we actually pay coinage on collections. That is, when the customer pays FirstRain we pay the sales person. This could be within 30 days of signing, or if it is a multi year deal it could be each year of the contract the sales person is paid as the company is paid, if the sales person is still with FirstRain. (As a result the company and the sales person's interests are aligned to ensure happy and delighted customers).
The timing of when our people actually "make money" - on booking, billing or collection - is a healthy debate I am happy to have with my team especially as our business snaps back and the growth is now back on. And I love that the debate about our marketing campaign provoked a discussion about what making money really means for us. I haven't pointed out that for the management team it's even more deferred - the significant upside only happens when we have built a successful, quality, sustainable company!
Friday, August 28, 2009
Seeking beta users to try out the new FirstRain
We are in the final stages of beta for our new release - designed for business professionals to find the latest information and trends on companies, markets and business topics from the web. You can check out a short demo here.
Everyone we have shown it to - prospects, customers, friends - has a "wow!" reaction. It's fast, it's easy and it's very powerful. But like any new software we have a long list of enhancements we're working on and we want users to help us expand the use cases. We're very good at getting the right information for professional investors - our customers tell us that. We're very good at getting the right information for powerful platforms like Capital IQ and FactSet (and several more to be announced soon). We have many sales and marketing customers using our beta - but I believe we can add a lot more power too!
So I want to see how any business professional would use it. Would you like to try it under our "Friends and Family" program? If so go here - give me as your contact and I'll set you up.
The research engine is for the world that needs a new generation of business information - for investors, sales people, marketing people, investment bankers, lawyers, M&A, VCs... anyone who values high quality web content about the markets they are working in but has no time to find it - and finds the mess of consumer search alerts and RSS readers brings them too much, and too little quality and so wastes their time while they still miss the really interesting stuff. Take it out for a spin.
Ratcheting up CEO pay - or competing for talent?
If you were on the compensation committee of a public company board how would you set the CEO's pay?
There is so much written about fat cat CEOs and their unfair pay packages that this is a question worth pondering (if you care). The really hard part about it is judging what is a) fair, b) necessary to get the talent you want and c) the market.
One tool compensation committees use is the "peer group". This is the list of companies which are "like" your company. They are supposed to be similar in size, similar in market reach, something you can compare with to figure out what your CEO should be paid. But as the Wall St Journal points out recently, the very use of the peer group can cause CEO pay to ratchet up.
The problem goes like this. Most companies are planning to grow and want to have a CEO that can grow the company and make it larger and more competitive. As a result, they pick peer groups that while they have some companies that are smaller, many of the companies on the list are larger with higher paid CEOs than the current CEO - two studies cited by the WSJ confirm this. (The SEC only started requiring companies to publish their peer groups in 2006 so there is now enough data for the pundits and researchers to start to dig.)
At the same time, over 40% of companies cite that they want to pay their CEO's above market average - numbers like 60% and 75% of market are often used.
So, if your peer group is larger companies where the CEO pay is higher, and you want to pay your CEO above market, you will take CEO pay up. It's a compounding phenomenon.
Sounds like a conspiracy right? Well, sitting on two very quality compensation committees I can tell you from experience it isn't. It's a very real challenge for boards to figure out the right level of pay. High enough to attract a great CEO who can take the company on the growth journey you want (which takes both smarts and courage) and not so high that it hurts the P&L or creates too great a gap to other executives and the employees.
The good news is the peer group is just one tool we use. We also look carefully at internal executive pay to make sure we are not creating an internal problem, and more importantly at the job the CEO is doing and how he is conquering our strategic objectives.
Most senior executives' compensation is now made up of three major components - base salary, variable bonus based on company performance and some form of stock (options or RSUs). Having these levers allows the board to align the CEO's pay directly with the interest of the shareholders - as has happened to most tech companies over the last year there are few bonuses being paid because performance hasn't been there as a result of the recession.
Of course you do still see companies that offer their CEO compensation that doesn't seem very aligned to shareholder interest to me: use of the private jet, special healthcare, tax advice, golf club memberships etc - and even a key to the executive washroom. Something I don't understand but I guess I am an egalitarian when it comes to building company culture.
Wednesday, August 26, 2009
In person trumps telephone every time
I've had a couple of recent incidents where I was reminded, yet again, of how important it is to meet in person on critical decisions.
I say this in a context where today most of my daily meetings have some phone component. FirstRain is across three sites: San Mateo, New York and Gurgaon and so most of our meetings and discussions will have at least one person on the phone. So we have had to get good at it. And we use GoToMeeting a lot (if you use WebEx today - try GoToMeeting - it's much better).
But there are two (or at least two) cases where telephone dramatically reduces the effectiveness of the discussion.
First is interviewing. I have been hiring a new executive at FirstRain over the past few months and as a result meeting lots of interesting candidates. Several weeks ago I interviewed a candidate over the phone who seemed very strong. Smooth, articulate, smart and asked great questions. I was impressed and told the recruiter I wanted to meet the candidate in person.
When I did I picked up on the subtleties that you just can't get on the phone. A level of arrogance and self service that was in tone and body language, not in the words spoken. I could go on.... but won't.... needless to say I didn't continue.
For board members interviewing CEOs this is even more important - you have to look at "presence" and that cannot be detected over the phone.
The second case is board meetings. Technically as a public company board member you are considered to have attended a board meeting whether you are on the phone or in person and so it understandably happens that one board member or another is often on the phone because of personal or other business commitments. This happened to me this summer and I didn't like it. I was in the UK on a call to California for 8 hours and I found it much more difficult to participate and contribute at the level I like to in board meetings. I did my best under less than perfect circumstances.
It is particularly important to be in person when working on big issues like people or strategy. When I work on executive compensation in the Compensation Committee I always want to be in the room talking with the CEO. I want to watch his eyes, listen to his voice and figure out what problem he is really trying to solve. Likewise when I am working on strategy and positioning I want to be very interactive, able to jump to the white board and reflect what I just heard back to the CEO so we can test and then polish the concepts.
This summer's experiences have been a good in-my-face reminder. Some topics are effective on the phone but when it comes to people in person wins every time.
Friday, August 21, 2009
Cool technology: Samsung Sun Drive
After a 3 week hiatus from my blog (temporary brain cramp on writing) I am back and thought I'd start with the coolest piece of technology I saw thing morning when browsing (and QAing) our new research engine:
The new Zyrus Sun Drive - a thumb sized USB solar power supply! Just the thing for the nomad. We've used solar power packs for our devices when camping before - they are not new. What I find intriguing about this one is the size. It's a pocket size charger and sells for 29,000 Won or about $23 and claims more than 90 minutes of talk time - enough for your average conference call from the beach when you've worn down your battery working on email (which happens to me a lot).
Of course the truly useful product for me would be a battery powered iPhone. Today Samsung sells a good looking solar powered phone and I know I am not the only one with this need - Safaricom is launching a solar power phone service into Kenya made entirely from recycled materials (something I'll clearly need for my next major adventure) - but I confess I do love my iPhone and so hopefully Apple will one day add a sleek solar panel to it.
But if not - I may well switch phones to be fully express my nomad self.
Friday, August 7, 2009
Predicted continued growth in business information
The annual VSS report on the communications industry is out (I found it through paid content's reporting) and it has interesting growth numbers for our business.
For the first time last year consumers spent more time with media they had paid for than with media supported by ad revenue. Clearly ad revenue is in decline in traditional media like newspapers and TV but it's a sign of long term health for the communications industry that people are willing to pay for content that matters to them - like video games and subscription TV.
At the same time business information continues to grow rapidly in importance, despite the downturn. Business people are more than willing to pay for information that helps them grow their businesses - especially in financial services, in marketing and in sales productivity. We see this every day.
The report is an interesting read - here's the section specifically about the growth of our market:
"VSS forecasts that the institutional sectors and various alternative media segments will drive overall communications spending for the next five years. More specifically, institutional end-user spending will remain the largest and fastest-growing communications sector, rising by 5.6% annually as a result of strong gains in business information services, particularly in the marketing and financial services sub-segments, and the for-profit higher education sub-segment of educational and training media and services."
VSS reports summary table of growing and shrinking marketsWednesday, August 5, 2009
Team building in a small company
We just passed through our half year point at FirstRain and I brought the whole US company together here in San Mateo this week. My purpose was two fold - first for training on the new research engine, how to sell it, where to sell it, and what's coming next - and second team building across the company and some celebration for the success we are already seeing with the new research engine - just a few weeks into it's beta.
The second purpose was by far the most interesting and fun. I wanted to team build both at a professional level by working problems together and also at a personal level to develop stronger relationships between people who work in different offices and across different time zones. So Sunday was family bonding, Monday was training and planning, Tuesday was everyone team building.
Here's an overview of the agenda - it really worked well.
Sunday afternoon - Bar-be-que at my house for all employees with families and swim gear. Food, wine, beer, music, swimming, teenage life guard, dogs overeating - everyone had fun.
Monday all day - Sales training
Each rep - present on 1H results, Q3 pipeline, key learnings, top 3 accounts
Marketing - training on market segments and how to work our value in each segment
R&D - next 90 days of product enhancements
Discussion - deep dive on a key capability sales needs and R&D is developing - ensure they are on the same page
Monday afternoon - Ops planning (separate from sales)
Ops team (R&D and analytics) working through near term and long term product and IP plans
Tuesday morning - Everyone together
1H review - financial results, major milestone - releasing the research engine
Problem solving #1 - teams of 2 - each speak uninterrupted to the other for 3 minutes about what is challenging right now
Problem solving #2 - group into teams of 6 - share what each heard - pull out the top 3-4 challenges we face right now
Problem solving #3 - new teams of 6 - chose 2 challenges to solve - bring back the solution
Long term technology and product vision - passionate and interactive discussion about where FirstRain is headed
Tuesday afternoon - Treasure Hunt in San Francisco
Tuesday evening - Dinner at Fior d'Italia - and awards
The whole session was great fun but the best part was the problem solving exercises. Everyone threw themselves passionately in and not only was it important to hear the challenges people are facing but it was also terrific to hear the ideas and solutions the teams came up with for some of our more pervasive challenges.
And the treasure hunt in San Francisco was absolutely fantastic. We broke up into 5 teams - each team was given a set of clues to solve and a map of the area - we did the hunt in North Beach. It was run by Mr Treasure Hunt and it was much, much better than any of us had imagined it would be. The clues were mentally challenging and winning took strategy and the willingness to hoof it fast around the city. Now maybe I enjoyed it so much not only because of the team building but also because my team won and brought all the right answers back 30 mins ahead of the nearest team - but I did have some big brains on my team (not including me)!
Finally dinner at Fior - the oldest Italian restaurant in the US (hard to believe it is in San Francisco and not New York or Boston but it is). We had created awards and plaques for all everyone who had worked so hard to bring the research engine out in June and made it such a hot product for us. Great fun, and much wine, for all.
Wednesday, July 29, 2009
Goldman's role: conspiracy or an expected outcome of hiring talent?
I confess I am not a very frequent reader of Rolling Stone so this article on Goldman took a few weeks to get to me. But it's a riveting read.
It's more on the theme of Goldman Sachs as the great evil - but it reads like a paranoid conspiracy theory. Could Goldman truly be behind and benefiting from all major speculative bubbles since the Great Depression?
The heart of the conspiracy theory is that Goldman alumni are everywhere - therefore they must be manipulating the markets to Goldman's advantage. I think this is a paranoid take on a very natural market phenomenon.
The explanation is much simpler. Goldman hires the best and the brightest out of college. While not everyone you meet at Goldman is super sharp, most are. Especially in the investment banking and research groups. As a result, we see an undue proportion of senior positions in the government and major financial institutions by Goldman alumni because very smart people who were at Goldman within the last 25 years are now available to staff very hard jobs and they are the brightest - and talent really matters when you are dealing with complex, interdependent issues.
This is not unlike seeing Intel alumni populated throughout semiconductor leadership 20 years later - or Oracle and Microsoft alumni scattered throughout the leadership of software companies. When you have very bright people trained for 20 years at a high quality high growth company they are like gold for future employers - even the federal government.
So we should expect to see Goldman alumni in positions of power and have confidence that the rewards they reap, and controls they experience, in their current positions will drive and ensure high integrity behavior.
But as my paranoid friends like to tell me - maybe I am naive!
Monday, July 27, 2009
The APs latest move is like King Canute
The story of King Canute ( or more correctly Cnut) is one every English schoolchild learns as a lesson against the unstoppable tide (and often incorrectly retold as a warning against undue pride).
King Canute was a Viking king of England, Denmark, Norway and parts of Sweden in the early 11th century. The tale goes that his courtiers would flatter him every day, telling him how great and powerful he was. In order to teach them a lesson he took his throne down to the shore and ordered the tide not to come and and wet his robes. Well of course it did, his feet got wet, and he proved his point to his courtiers that he was not all powerful so they should lay off the meaningless praise.
The story is one not only about humility, but it is also about the unstoppable nature of the tide.
The Associated Press' latest move to declare that they are going to single handedly change fair-use laws looks like a similarly futile position. While they are not openly declaring "we're going to change fair-use laws" that is the implication of the statements they have been making.
Their plan is like this - DRM the news (put in markers so they can see where it is syndicated) and then everyone that uses it - even as little as a title and a link - will have to sign a licence with the AP. They are understandably trying to stop the practise of wholesale copies of their content - this is a reasonable thing to fight. But what they say is much more aggressive - they want to stop aggregators like Google even using just a title and login.
This goes to the heart of fair use. I am no lawyer but so far, across a number of cases, reusing the title of an article - and a brief summary - is not considered a breach of copyright.
Linking is the water in the tide. It's at the very heart of how the internet works. Trying to stop linking of content is effectively trying to get the definition of fair use changed in a field where the genie is already out of the bottle. It's a King Canute like move - challenging the internet to not wet the APs robes.
The AP may make some web sites lives a headache for a while. The Huffington Post licenses AP content because it was easier to do it than to fight it as their traffic grew so enormously in the election year. I am sure a number of other major sites will also sign licenses because it will be cheaper than hiring lawyers. But I believe in the end the AP lose the battle ground they are staking out. As TechDirt says:
This has been said before (multiple times) but you don't rescue your business model by "protecting" against what people want to do. You don't rescue your business model by wasting resources trying to hold back what people want to do. You rescue your business by providing more value and figuring out a way to monetize that value. Putting bogus DRM on news does none of that. It only hastens failure.
Wednesday, July 22, 2009
Time for the Goldman Sachs bankers to take a vacation
Many people are understandably impressed with Goldman Sachs' recent financial results. True to their reputation for quality they have come roaring back from their losses with outstanding profits - and even more disgruntled attention than ever.
But there is one way in which Goldman must change which they did not anticipate before this last recession. In September last year, Goldman and Morgan Stanley gave up their status as the last two remaining independent investment banks. According to the New York Times at the time their request to transform into bank holding companies "was a blunt acknowledgment that their model of finance and investing had become too risky and that they needed the cushion of bank deposits.
By becoming bank holding companies, the firms are agreeing to significantly tighter regulations and much closer supervision by bank examiners from several government agencies rather than only the Securities and Exchange Commission."
And it is this tighter regulation that now forces bankers to take a vacation. Why you ask?
Well, the best investment bankers tend to be workaholics, never taking real vacations where they would not be connected all the time and working on their blackberries. I've heard many a story of marriage and family stress as a result. The pressure is especially on now when Goldman bankers have more work offered to them than they can take and can charge a premium for their services so there is a great deal of money to be made this year.
However, one of the important internal audit checks that mature companies have already learned to deal with is that anyone working with the financials of a company must take 2 weeks of vacation and not be connected - truly not be in touch and influencing any decisions.
The reason for this is an internal audit check: if there is any skimming or embezzlement going on it will show up when the embezzler is out of touch, or put another way if you are running an embezzlement scheme within a company you won't be able to keep it running (or hidden) if you are completely out of the loop for two weeks.
A Goldman friend of mine told me this is a shock to the continuously connected Ibankers. They had thought the bank would turn a blind eye to the new vacation requirements and they'd still be able to work on their blackberries, but they are finding that no, they must truly disconnect.
This can only be good in the long run. Everyone needs to unplug occasionally, stop and remember there is life outside of work. But let's hope they can plan their vacation around their transactions or it will be stressful for their clients.
Thursday, July 16, 2009
The difficulties embedded in the Obama administrations Executive Compensation Principles
I sit on two public boards (JDSU and Rambus) and sit on the Compensation Committee on one, and chair it at the other - so executive compensation trends are very important to me. Add that I have been a public company executive several times (although I choose the private company world today) and I am watching the Obama administration's rhetoric with interest.I was sent a briefing recently that outlines the Executive Compensation Principles the administration is espousing - see the description below.
While I am as disgusted as the next shareholder at obscene executive pay packages for failed executives I see two major difficulties with these principles.
The first is the implication that current compensation programs are not set up for the long term. Most good public companies absolutely require their executives (and board members) to hold stock minimums for the long term and many set up objectives to measure long term strategic program investment, not just short term performance.
It's easy to say "reward long term value-creation", but it's an incredibly hard thing to do in a measurable way - and compensation objectives have to be measurable or they are open to manipulation. Compensation tied to revenue is short term, when tied to strategic objectives it's very hard to know which objectives will really have impact in the long term - and yet they are easy to judge in hindsight. Using stock options as the reward works well because they vest over time and they only have value if the stock appreciates - but options have been under attack from the regulators and institutional shareholders for a while now which I think it very short sighted.
This leads to my second concern. Only the CEO and the executive team really know what the critical issues are in a company in depth. Boards do their absolute best to stay on top of the issues, to get briefed, to talk with customers and employees, but as a sitting CEO I know that only I have all the information being processed in one brain. My companies spend a great deal of time to keep me up to speed but it's a continuous, intense investment especially when things are changing fast.
This makes it a significant task for a board to set and review objectives and we spend a great deal of time on this at the compensation committee level. If it's hard for boards - who have all the information not just the publicly filed information, how much harder will it be for shareholders to make a realistic assessment of what are appropriate compensation measures?
Transparency is good. It's essential to build trust with shareholders. But while "Say on pay" is a great solution to the obscene packages, does it makes sense in 99% of the cases which are not obscene? Does it make sense in the cases of highly competitive industries where great CEOs are hard to find, and when you find them you need to pay them well to attract them and compensate them for the hard work and risk they take on as they strive to be a great company CEO?
It seems a crime to me that a handful of bad actors could cause regulatory changes which will hurt good companies ability to pay for performance - to pay significant pay packages for excellent performance. Institutional shareholders understand great CEOs earn their pay packages, and that bad ones should be fired. I worry that retail shareholders (that's you and me not the mutual funds) won't ever think a great CEO is worth $20M+ a year - and yet they may well be based on their future performance - but it can only be measured in hindsight (which means board judgment in advance) and not at the time the shareholders will be asked for approval.
Tough issue, and not one where I think more regulation is the answer. I think the answer is tougher board process and greater and greater transparency into board process in response to shareholder demands - but don't tell boards how to set compensation. Make compensation committees be very very transparent but let them do their jobs.
The Administration's executive compensation principles:
1. Long‐Term Pay for Performance Link
- compensation plans should be designed to reward long‐term value creation for investors, as
opposed to the short‐term focus that doomed financial institutions in the market meltdown. The
administration also emphasized that a broad range of external and internal metrics should be used beyond just stock price, which is not always the best indicator of the long‐term strength of the company.
2. Long‐Term Risk Time Horizon
- that executives maintain strong company ownership through the holding of equity‐based
compensation is one of the best methods to link executive pay with company performance. Compensation plans for both executives and other employees should be designed to match the risk outcomes of their performance.
3. Risk Management
- Committees should include risk‐management in the pay setting process, and conduct the
risk assessment in a public manner.
4. Appropriateness of Golden Parachutes and Supplemental Retirement Packages
- should reevaluate the necessity for golden parachutes and supplemental retirement packages,
and should determine whether their existence will result in pay for non‐performance.
5. Transparency and Accountability in Pay Setting
- Treasury Department plans to require more transparency and accountability for Compensation Committees by legislating Say on Pay and Compensation Committee independence standards.
Friday, July 10, 2009
The balance between marketing and hype with a new product
Sometimes it's hard to contain your enthusiasm when you have a new product to market and the temptation is to get carried away and over hype. It's this behavior that can give engineering a bad rap with marketing and marketing a bad rap with sales.
Here's the classic typical scenario
R&D truly believes the product is way ahead of where it really it. It's ready, it's fast, all the functionality is basically there, it's usable today etc. This comes from (often justifable) pride in the technology that's been developed. Note technology, not whole product.
Marketing, trying to bridge the gap and get revenue going on a new product presents the product to sales as ready to do. You can show it to customers and start them using it, it's got 80% of the functionality and the rest is coming in the next release, yes take it to your best customers and get them using it. Sell it now.
Sales lives with the ultimate reality - what the product actually does, how easy it is to use, how fast, and how much functionality is really ready for prime time. Often sales stubs their toe, has to work through who they can really take it to and who should wait for the next release? Seasoned sales team are naturally cautious.
Typical right?
Sometimes however, it works the other way around and hype can be used as a carefully orchestrated momentum builder - the Steve Jobs reality distortion field is a great example. If you say it enough with enough integrity and conviction it will become truth.
It's the tension between the normal experience sales and marketing teams have with new products, and the extreme of Apple's strong stance on every new product that makes this new video from Palm (below) so funny.
Roger McNamee (a wild and crazy guy - but a really good guy) is known for his hyperbole, especially about the new Pre coming from (his majority investment in) Palm. Jon Rubinstein is ultimate innovator and product designer - the brains behind the iPod - and a much more low key guy.
I'm happy to say that as we bring out our new research engine into the market my team, while human, is working hard to balance the process pretty well and manage our natural enthusiasm for what we think is really big. But it's tempting...
Monday, July 6, 2009
A perfect week in Rome: Vacation report
I took the week before July 4th off in Rome - and posted about it on my personal blog - How to spend a perfect week in Rome - if you are curious or thinking of travelling to the Eternal City.
